Beyond Bending Tell You How
When applying for a credit card, one of the questions that are commonly asked is the monthly housing payment. This information is important to the credit card company as it helps them determine your creditworthiness and ability to pay back any debts that you may incur.
It is important to note that this question is not only asked for credit card applications, but also for other financial products such as personal loans and mortgages. In this post, we will look at what to put for monthly housing payment on a credit card application and what factors to consider when answering this question.
What is Monthly Housing Payment?
The monthly housing payment is the amount of money that you pay towards your housing expenses every month. This includes rent or mortgage payments, property taxes, homeowner’s insurance, and any other related expenses.
When applying for a credit card, the credit card company wants to know your monthly housing payment as it is an indicator of your financial stability and ability to pay back any debts that you may incur. This information helps them determine your creditworthiness and whether or not you are a good candidate for their credit card.
How to Calculate Monthly Housing Payment
If you are renting, your monthly housing payment is simply the amount of rent that you pay every month. However, if you are a homeowner, your monthly housing payment includes several expenses such as mortgage payments, property taxes, homeowner’s insurance, and any other related expenses.
To calculate your monthly housing payment as a homeowner, you need to add up all of these expenses and divide the total by 12 to get your monthly payment.
| Expense | Monthly Cost |
|---|---|
| Mortgage Payment | $1,500 |
| Property Taxes | $500 |
| Homeowner’s Insurance | $100 |
| Other Expenses | $200 |
| Total Monthly Housing Payment | $2,300 |
Using this example, the monthly housing payment for this homeowner would be $2,300.
Factors to Consider When Answering the Monthly Housing Payment Question
When answering the monthly housing payment question on a credit card application, there are several factors that you should consider.
Accuracy
It is important to be as accurate as possible when answering this question. Providing incorrect information could lead to a denial of your credit card application or could result in higher interest rates and fees.
Current Housing Situation
You should consider your current housing situation when answering this question. If you are a homeowner, your monthly housing payment will be higher than if you are renting. If you are living with parents or friends and do not have a regular housing payment, you should indicate this on your application.
Future Housing Plans
If you plan on moving to a different location or purchasing a new home in the near future, you should take this into consideration when answering the monthly housing payment question. It may be beneficial to provide an estimate of what your future monthly housing payment will be.
Other Monthly Expenses
You should also consider your other monthly expenses when answering this question. If you have high monthly expenses such as car payments, student loans, or credit card payments, your credit card company may view you as a higher risk borrower.
Debt-to-Income Ratio
Your debt-to-income ratio is an important factor that credit card companies use when determining your creditworthiness. Your debt-to-income ratio is the percentage of your monthly income that goes towards paying your debts. If your monthly housing payment is high and your debt-to-income ratio is high, this could indicate that you are a higher risk borrower.
Conclusion
When answering the monthly housing payment question on a credit card application, it is important to be as accurate as possible and to consider your current housing situation, future housing plans, other monthly expenses, and debt-to-income ratio. Providing incorrect information or omitting important details could lead to a denial of your credit card application or higher interest rates and fees.
